Bharti Airtel Management Presentation Singtel Investor Day
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Bharti Airtel Present in 20 Countries #2 Operator In Africa 5 1.85bn Addressable Population 4 #1 Operator In India 1 #3 in-country wireless service operator in the world 2 US$15.1bn Revenue 3 #4 Operator in the World 1 Source: TRAI and Informa Telecoms and Media Notes: 1. As of Dec 31, 2014 2. Based on proportionate equity subscriptions with data from Informa Telecoms and Media. In-country wireless operator refers to single country subscribers 3. FY2015 Revenue 4. Combined population for the regions in which Airtel has a footprint 5. As measured by proportionate equity subscription in a single country, according to 2014 Informa Telecoms and Media 3
Highlights 1 Diversified operator with dominant position in marketplace 2 Large residual opportunity with bulk investments in place 3 Growth Strategy: Voice Secularity, Mobile Data and New Services 4 Focus on customer stickiness with increasing postpaid share 5 Focus on generating efficient utilization on operating and capital expenditures 4
1 The Leading Indian Wireless Operator 23% Wireless Subscriber Market Share 1 31% Wireless Revenue Market Share 2 Customer Market Share 23% 19% 16% 11% 9% 8% 7% 7% 220 180 153 107 84 80 66 63 5.6% 3.6% Bharti Airtel 7.2% 17.5% 5.6% 30.9% Vodafone RCOM BSNL+MTNL Idea Tata Aircel 6.2% 23.4% Others Bharti Airtel Vodafone Idea Reliance Comm BSNL&MTNL Aircel Tata Others Airtel has leadership in 17 circles of the total 22 circles (rank 1 or 2) with average RMS of 36.4% in these circles Source: TRAI Notes: 1. As of Jan 31, 2015 2. For quarter ended Dec 31, 2014. Calculated on the basis of Gross Revenue for UASL + Mobile +CMTS licenses 5
2 India: Investments To Yield Results Nominal Value of liberalized spectrum at USD 12 billion 1 Industry leading revenue 2 yield/mhz at 2x avg with same cost/mhz Wide spectrum presence: 16.1% 3 spectrum market share Largest optical fiber network amongst private players Prime spectrum to yield data growth: Virtually Pan India 3G & 4G Source: 1. Including Qualcomm licenses, excluding administered spectrum 2. Annualized 9M Revenues for FY15, Utilization based on 2G/3G spectrum 3. Ex 20 MHz BWA spectrum holding in 8 circles 6
2 India: Strong Spectrum Position Bharti Airtel s Spectrum Position Spectrum Holdings Spectrum Band Industry Spectrum (MHz) Industry Spectrum ex BSNL/MTNL (MHz) Spectrum held by Bharti (MHz) Bharti spectrum Market Share ex BSNL/MTNL 900 439.6 295.2 116.4 39.4% 1800 955.3 877.3 177.1 20.2% 2100 535.0 425.0 100.0 23.5% 2300 660.0 440.0 80.0 18.2% Spectrum across 900/1800/2100/2300 bands, more or less fungible across technologies Hold 553.5 MHz (393.45 MHz paired & 160 MHz unpaired) spectrum During Mar 15 auctions, the company spent ~58% of the overall spend on acquiring growth spectrum Only operator with pan India 3G & 4G footprint - widest broadband footprint in India. Bharti has rolled out 3G and 4G services - with over 17 million 3G customers and close to 300,000 customers in 4G LTE across 19 cities Bharti Airtel plans to leverage its existing network and superior spectrum position for data roll-outs Source: TRAI, Department of Telecom, Company Filings 7
2 India: Incumbent with Growth Opportunity Penetration Share < 60% 60% - 90% 90% + No 1 Share No 2 Share No 3 Share 8
2 Africa: Geographical Opportunity & Performance Mobile Penetration(%) Number of Countries < 60% 8 60% - 90% 6 > 90% 3 Market Position Number of Countries # 1 8 # 2 6 # 3 3 Number of <=2 3 >=4 competitors No. of countries 1 9 6 2 Through organic as well as in-country acquisitions we are #1 or #2 in 14 markets Source: Company data, CIA World Factbook, World Bank Note: 1. Only GSMA telecoms considered 9
3 Growth Lever: Voice Secularity Volume Growth Value Growth Carries over 1 trillion minutes Secular Volume growth Y-o-Y Significant gap between realized and rack rates (VRPM up 3.5% from trough of 35 paise) 1 paisa upside adds $200 mn to top line Significant headroom for value as well as volume upside on a secular basis 10 of 44
3 Data Opportunity: Largest Data Network In India 250000 3G sites up 56.0% YoY 1 40.0% Expected Population Coverage Growth 2 200000 150000 100000 31,301 22.6% 34,564 38,055 24.7% 26.9% 41,850 29.3% 48,825 33.3% 35.0% 30.0% 25.0% 20.0% 15.0% 50000 10.0% 5.0% 0 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 3G Sites Total Sites % 3G sites 0.0% 4G services launched Launched in 19 cities in India on mobiles, mifi, dongles, home wifi routers Africa s first 4G service: 4G launch in the Seychelles Partnering Nokia Networks to launch ultrafast 4G services in India s first FDD LTE on 1800 MHz across 6 circles Source: 1. Company filings 2. Ericsson 11
3 Annualized Data Revenues Surpassed $1.5bn 25 16.20% 17.60% 20% 18% 20 15 10 7.40% 9.20% 10.30% 11.50% 12.40% 14.50% 16% 14% 12% 10% 8% 6% 5 4% 2% 0 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 0% Data Revenues (INR bn) Data as a % of Mobile Revenue Source: 1. Company filings 12
3 Growth Story: Airtel Money, Wynk, Industry First Initiatives Airtel Money Offered in India and all 17 opcos in Africa KPI: Africa (Q4FY15) Sub base of 6.2 million (up 1.8x YoY), transaction Value: $2,925 million (up 31% YoY) Wynk Carrier agnostic music app with a curated library of 1.8 million songs 5 million downloads in just 6 months of launch One Touch Internet Makes internet discovery easy for first time users 53 million page views within 4 months of launch Accredited as Best Mobile Service of the Year for customers at GSMA Global Mobile Awards 2015 at Barcelona 13
4 Quality Subscriber Acquisitions India: Churn % Africa: Churn % 8.50% 6.70% 6.10% 7% 6.10% 5.80% 5.50% 3.20% 3.20% 2.40% 3.10% 2.70% 2.50% Sep 12 Feb 13 Jul 13 Dec 13 May 14 Oct 14 Mar 15 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Airtel has industry wide lowest churn at 2.5% In Africa, churn % decreased from 7% to 5.8% YoY Led to rationalization of Gross Acquisition Costs driving INR 10bn savings Source: As per company s reported numbers 14
5 Focus On Efficient Utilization Of Opex/Capex 75.6% 77.7% 76.6% 78.9% 77.4% 229,616 228,452 232,171 230,155 Invested for growth -> yielding results 222,193 45.0% 44.3% 44.0% 43.9% 43.0% Passive Infrastructure sharing Divestment of towers in Africa underway Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Total revenues Opex to Total revenues Capex Productivity (INR Mn) Increasing Operating and Capital expenditure productivity 15 of 44
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